IN RE PLAID INC. PRIVACY LITIGATION

Background

This consolidated action consisted of five proposed class actions brought by 11 named plaintiffs. The plaintiffs alleged that Plaid used consumers’ banking login credentials to obtain financial-account data without authorization, that Plaid Link made its login screens resemble screens used by financial institutions, and that Plaid sold accumulated banking data to third parties. After an earlier order dismissed some claims and allowed others to continue, the parties negotiated a settlement.

Settlement Terms

Plaid agreed to pay $58 million into a non-reverting settlement fund. Eligible class members could receive proportional payments by check, automated bank transfer, PayPal, or Venmo. The settlement also required Plaid to make business-practice changes, including deleting certain data, minimizing stored financial data, adding disclosures to the Plaid Link process, improving its privacy policy, and prominently linking to Plaid Portal, where users could view and manage account connections.

Class members would release claims arising from or related to the allegations in the action that were asserted or could have been asserted against Plaid and the other defined released parties. The proposed settlement class included natural persons residing in the United States who owned or previously owned qualifying financial accounts from January 1, 2013, through November 19, 2021, the date of preliminary approval.

Final Approval

Under Federal Rule of Civil Procedure 23, the court evaluated whether the settlement was fair, reasonable, and adequate. The court had previously examined the settlement and conditionally certified the settlement class. At the final-approval stage, it considered the effectiveness of notice, the class members’ response, the fee request, and the requested service awards.

The settlement administrator sent email notices to 60,271,546 class members with valid email addresses after removing duplicate records, mailed 650,669 postcards, and used a media-notice program that generated more than 369 million impressions. The administrator received 1,256,738 claim submissions, producing an estimated claims rate of 1.28 percent, and class counsel estimated that claimants would receive about $31.50 each. There were 1,768 timely exclusion requests and five timely objections.

The court overruled the objections concerning the amount of monetary relief, equal payments to claimants, information on the settlement website, the opt-out process, the claims process, Plaid Link’s alleged appearance, and the notice’s reference to Donna M. Ryu as “Judge” rather than “Magistrate Judge.” The court concluded that the notice plan was the best notice practicable under the circumstances and that the settlement’s monetary and injunctive relief was fair, adequate, and reasonable in light of the litigation risks and the claims’ uncertainty.

Fees, Expenses, and Service Awards

Class counsel requested $14.5 million in attorneys’ fees, equal to 25 percent of the settlement fund. After requiring supplemental evidence about the firms’ division of labor and billing rates, the court found that the work was reasonable and not unduly duplicative. It nevertheless reduced the hourly rates used for attorneys at Herrera Kennedy LLP and determined that a reasonable fee was 19 percent of the fund. The court awarded $11 million in attorneys’ fees.

The court also awarded class counsel $115,920.21 for reasonably incurred litigation expenses. It approved service awards of $5,000 for each of the 11 named plaintiffs, totaling $55,000.

Disposition

The court granted the plaintiffs’ motion for final approval. It granted in part class counsel’s motion for attorneys’ fees, costs, and service awards. The court required class counsel to file post-distribution accounting reports after distributing the settlement funds and paying attorneys’ fees.